The interest rates on Federal education loans change on July 1, and
are based on the 91-day rate from the last Treasury auction in May
and the average one-year constant maturity Treasury yield
(CMT) for the last
calendar week ending on or before June 26th.
The following rates are updated automatically
by a program that retrieves the latest appropriate Treasury bill
auction data from the
US Treasury web site.
(During the month of June, the rates may reflect the updated reference rates. Check the date of the 91-day T-Bill and CMT reference rates listed below to see whether the student loan rates refer to the old or new academic year.)

Please note that the College Cost Reduction and Access Act of 2007 cut
the fixed interest rates on newly originated subsidized Stafford loans
for undergraduate students to 6.0% (2008-09), 5.6% (2009-10), 4.5%
(2010-11) and 3.4% (2011-12), with a return to 6.8% in 2012-13. These
cuts are available only to undergraduate students, not graduate
students, and only for subsidized Stafford loans, not unsubsidized
Stafford loans. Those loans remain at a fixed rate of 6.8%.

The Health Care and Education Reconciliation Act of 2010 switched to
100% Direct Lending for all new loans starting July 1, 2010. The
Direct Loan program has a lower interest rate on the PLUS loan than in
the FFEL program (7.9% vs. 8.5%).

In the following table, the In-School Rate includes grace
and deferment periods, and the Repayment Rate includes
forbearance periods.

Date Disbursed

Type

In-School Rate

Repayment Rate

7/2010-6/2012

Stafford

6.80%

6.80%

PLUS

7.90%

7.90%

7/2006-6/2010

Stafford

6.80%

6.80%

PLUS

(FFEL) 8.50%(DL) 7.90%

(FFEL) 8.50%(DL) 7.90%

7/1998-6/2006

Stafford

1.75%

2.35%

PLUS

3.15%

3.15%

7/1995-6/1998

Stafford

2.55%

3.15%

PLUS

3.39%

3.39%

7/1994-6/1995

Stafford

3.15%

3.15%

PLUS

3.39%

3.39%

10/1992-6/1994

Stafford

3.15%

3.15%

PLUS

3.39%

3.39%

For use with Net Present Value calculations, the discount rate
based on the most recent 10-year Treasury note is 2.75%.

The interest rates listed above are based on the
following reference rates:

91-day T-Bill rate of 0.05% (05-28-2013)

CMT rate of 0.29% (06-25-2010)

10-year Treasury Note rate of 2.75% (11-13-2013 10-YEAR)

The interest rate formulas are as follows, where the 91-day T-bill rate is the investment yield of the 13-week Treasury Bill, not the discount rate:

Date Disbursed

Type

In-School Rate

Repayment Rate

Cap

7/1/2010 to 6/30/2012

Stafford

Fixed Rate of 6.8%

Fixed Rate of 6.8%

NA

PLUS

Fixed Rate of 7.9%

Fixed Rate of 7.9%

NA

7/1/2006 to 6/30/2010

Stafford

Fixed Rate of 6.8%

Fixed Rate of 6.8%

NA

PLUS

Fixed Rate of 8.5% (FFEL) or 7.9% (DL)

Fixed Rate of 8.5% (FFEL) or 7.9% (DL)

NA

7/1/1998 to 6/30/2006

Stafford

91-day T-bill + 1.7%

91-day T-bill + 2.3%

8.25%

PLUS

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9.0%

7/1/1995 to 6/30/1998

Stafford

91-day T-bill + 2.5%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9.0%

7/1/1994 to 6/30/1995

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9.0%

10/1/1992 to 6/30/1994

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9.0%

PLUS

CMT + 3.1%

CMT + 3.1%

10.0%

As of 11-12-2013, the current projections for the 2014-2015 variable interest rates are:

Projected Stafford Loan (In-School/Grace Period): 1.78%

Projected Stafford Loan (Repayment Period): 2.38%

Projected PLUS Loan: 3.18%

These projections would yield the following consolidation loan interest rates:

Projected Stafford Loan Consolidation (In-School/Grace Period): 1.88%

Projected Stafford Loan Consolidation (Repayment Period): 2.50%

Projected PLUS Loan Consolidation: 3.25%

These projections represent a projected increase of 0.030% in interest rates.

These projections indicate what the student loan interest rates
would be if they were based on the most recent 91-day T-Bill
auction, as opposed to the last 91-day T-Bill auction in May.
They do not take into account the impact of future federal funds rate hikes and cuts by
the Federal Open Market Committee (FOMC).
Interest rate hikes and cuts by the FOMC usually trigger corresponding increases and cuts in
education loan interest rates. Since education loan interest rates are
based on market rates, and the market tends to anticipate interest
rate moves by the FOMC, the dates of upcoming FOMC meetings should
be considered when projecting likely education loan interest rate
increases. Specifically, one should consider the dates of all FOMC
meetings between the most recent 91-day T-Bill auction and the last
91-day T-Bill auction in May, plus any regularly scheduled June
meetings of the FOMC. For example, if the FOMC has increased the
fund rate by 25 basic points at each of its last three meetings
and there is one more FOMC meeting before the last 91-day T-Bill
auction in May, one can expect education loan interest rates to be
about 25 basis points higher than the projections listed above.

On February 8, 2002, President Bush signed legislation changing the
interest rates on education loans from variable rates to fixed rates for
new loans issued after July 1, 2006. The interest rate on the Stafford
Loan is 6.8% and the interest rate on the PLUS Loan is 7.9%.
The scheduled increase in the PLUS Loan interest rate was subsequently
changed from 7.9% to 8.5% by the Higher Education Reconciliation Act of 2005, as passed on February 8, 2006.
This bill, however, failed to make a parallel change to the Direct Loan
program, so only the FFEL PLUS Loan interest rate will be increasing to 8.5%.
Thus the fixed rates on new loans for which the first disbursement occurs on or after July 1, 2006 are: 6.8% Stafford, 7.9% Federal Direct PLUS and 8.5% FFEL PLUS.